The Lawletter Vol 46 No 7

Jim Witt—Senior Attorney, National Legal Research Group

            Historical background has always played an important role in the development of case law under the U.S. Constitution. With the emergence of original-intent theory, history, especially the legal history of England, has become even more influential. This point is exemplified by the continuing questions that arise over the interpretation of the Second Amendment to the U.S. Constitution, "Keeping and Bearing Arms—A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed. "

            The case law that has developed under the Second Amendment has largely focused on issues arising in the context of a state's right to raise and maintain a militia, with no U.S. Supreme Court decision dealing with the extent of an individual's right to bear arms. This changed in 2008, however, when Justice Antonin Scalia delivered the majority opinion in the 5-4 decision in District of Columbia v. Heller, 554 U.S. 570 (2008), in which the Supreme Court affirmed the right of an individual to keep arms in the home for self-defense.

The Lawletter Vol 46 No 7

April Wimberley—Senior Attorney, National Legal Research Group

            A bankruptcy court recently awarded attorney’s fees, compensation for emotional distress, and punitive damages to a debtor whose ex-husband continued litigating their divorce case in violation of the automatic stay. In re Payne, No. 20-30524 (Bankr. E.D. Va. Mar. 22, 2021). On January 15, 2020, the Circuit Court of Chesterfield County, Virginia, entered a final decree in the divorce case between Cynthia Payne and Thomas Payne. Thereafter, on January 31, 2020, Ms. Payne filed a Chapter 13 bankruptcy petition in the Bankruptcy Court for the Eastern District of Virginia. In response to the debtor’s bankruptcy filing, the ex-husband, through his attorney, filed several documents in the divorce case, including a motion to stay and a motion to rehear and reconsider. The respondents maintained that the purpose of the motion to stay was to prevent the expiration of the state court’s jurisdiction due to the debtor’s bankruptcy and to address her alleged failure to disclose the existence of a bank account during the divorce litigation. The motion to rehear and reconsider aimed to have the state court reconsider issues of equitable distribution. The respondents did not seek stay of relief from the bankruptcy court before filing the state court motions.

The Lawletter Vol 46 No 7

Mark Rieber—Senior Attorney, National Legal Research Group

            In Doe v. Wasden, No. 1:20-CV-00452-BLW, 2021 WL 4129144 (D. Idaho Sept. 8, 2021), appeal filed (9th Cir. Oct. 1, 2021), the court granted the two offenders' (John Doe and Randall Menges) motion for preliminary injunction challenging the requirement of their registration for the Idaho Sex Offender Registry because of Doe's conviction under a Crime Against Nature statute and Menges's conviction under Idaho's Crime Against Nature statute for engaging in consensual oral or anal sex. The court held that both offenders were likely to prevail on their claims that Idaho was violating their constitutional rights, which included a substantive due process claim, a procedural due process claim, and an equal protection claim. The court found that Idaho could have no legitimate interest in requiring offenders to register as sex offenders for engaging in private, consensual sexual acts and that the offenders had a protected liberty interest in both engaging in private consensual sexual activity and being free from the burdens of sex offender registration.

The Lawletter Vol 46 No 7

Brad Pettit—Senior Attorney, National Legal Research Group

            Although the general rule is that in the absence of an express agreement between a landlord and a tenant to the contrary, the tenant cannot recover from his or her landlord the costs of improvements that he or she made to the leased residential property, recent decisions by Idaho trial and appellate courts in the same case suggest that a tenant can obtain equitable restitution from his or her landlord on the ground of unjust enrichment for improvements to the leased premises that he or she made while the parties were mutually contemplating a future conveyance of the premises to the tenant as long as the landlord was aware of the improvements and never objected to them.

The Lawletter Vol 46 No 6

Matthew McDavitt—Senior Attorney, National Legal Research Group

     In some wills, testators expressly condition the beneficiaries’ receipt of legacies upon their survival to the date of actual distribution of the gift during the estate administration. In such circumstances, the question occasionally arises regarding the propriety of such survival mandate where (1) the administration is delayed beyond the average length due to dilatory conduct by the executor or due to litigation, and (2) one or more legatees survived the testator’s death but died prior to the distribution of the legacy. A handful of courts nationally have addressed this fact pattern, arriving at a logical rule applicable when unusual delay in distribution results in the one or more legatees predeceasing distribution.

     It is well-settled that the “personal representative is under a duty to settle and distribute the estate of the decedent . . . as expeditiously and efficiently as is consistent with the best interests of the estate.” 31 Am. Jur. 2d Executors and Administrators § 686 (2021). As such, a handful of American courts examining the issue have concluded that the equitable rule in this circumstance is that legacies conditioned upon beneficiary survival to the date of distribution vest at the time such legacies could first have been distributed (often a year from when the estate was opened), to protect such gifts when the administration is unduly delayed.

The Lawletter Vol 46 No 6

Lee Dunham—Senior Attorney, National Legal Research Group

     Your motion for summary judgment was denied. Not long thereafter, the judge in your case retires and is replaced by a new judge who seems much more sympathetic to your client’s arguments. The deadline to file a motion to reconsider has expired. Can you simply refile your motion and try your luck again with Judge #2? Sometimes, but caveats apply.

     Within a single action, consistency and efficiency are achieved by a doctrine known as the “law of the case.” See Watkins v. Elmore, 745 F. App’x 100, 102 (11th Cir. 2018); In re Justice Oaks II, Ltd., 898 F.2d 1544, 1549 n.3 (11th Cir. 1990). It is broadly similar to res judicata in that under the law-of-the-case doctrine, as a general rule, “an issue decided at one stage of a case is binding at later stages of the same case.” United States v. Escobar-Urrego, 110 F.3d 1556, 1560-61 (11th Cir. 1997); see also Hallahan v. Courier-Journal, 138 S.W.3d 699, 705 n.4 (Ky. Ct. App. 2004) (“The doctrine of law of the case establishes a presumption that a ruling made at one stage of a lawsuit will be adhered to throughout the lawsuit.”).

     Unlike res judicata, however, the law of the case is “not jurisdictional in nature, and the court's power is not limited thereby” but, rather, is “a rule of practice ‘self-imposed by the courts.’” United States v. Anderson, 772 F.3d 662, 668 (11th Cir. 2014). While res judicata is a rule of law, the law of the case merely “directs a court's discretion.” Arizona v. California, 460 U.S. 605, 618 (1983), decision supplemented, 466 U.S. 144 (1984).

     Notwithstanding the law-of-the-case doctrine, a court's previous rulings may be reconsidered as long as the case remains within the jurisdiction of the court.

The Lawletter Vol 46 No 6

Charlene Hicks—Senior Attorney, National Legal Research Group

            Prior to bringing a shareholder derivative action, the complaining shareholders must normally make a detailed presuit demand on the corporation’s board of directors or show the court that such a demand would be futile. In United Food & Commercial Workers Union v. Zuckerberg, No. 404, 2020, 2021 WL 4344361 (Del. Sept. 23, 2021), the Delaware Supreme Court announced a new “universal test” for determining whether a shareholder demand should be excused as futile. This new test imposes more stringent pleading requirements on the derivative plaintiffs to show futility.

            In United Food, the complaining shareholders alleged that the members of Facebook, Inc.’s (now “Meta Platforms Inc.”) board of directors violated their fiduciary duties when they voted in favor of a stock reclassification that would have allowed Mark Zuckerberg, Facebook’s CEO, to sell most of his Facebook stock while still maintaining voting control. The Board’s vote eventually led to the company spending approximately $90 million to defend against a class action lawsuit. The complaining shareholders filed the derivative action in an attempt to recoup those litigation expenses.

The Lawletter Vol 46 No 6

Fred Shackelford—Senior Attorney, National Legal Research Group

     In a case of first impression, New York’s highest court has expanded the scope of “bystander recovery” for the negligent infliction of emotional distress. A cause of action for negligent infliction of emotional distress compensates a witness for experiencing shock and emotional distress as a result of observing harm to another person. In many states, recovery for the negligent infliction of emotional distress is limited to persons who are in the zone of danger and who witness injury to someone who is a member of their family.

     In Greene v. Esplanade Venture Partnership, 36 N.Y.3d 513, 2021 WL 623832 (2021), the plaintiff and her two-year-old granddaughter were in front of a building when they were struck by debris that fell from its façade. The child died the next day, and the grandmother sued various defendants for emotional distress that she experienced as a result of witnessing injury to her granddaughter.

The Lawletter Vol 46 No 6

Alistair Edwards—Senior Attorney, National Legal Research Group

            As a result of the COVID-19 public health emergency, various states and municipalities around the country have imposed moratoriums on evictions and prohibited landlords for a certain period of time from filing eviction complaints for possession of real property. For example, on March 17, 2020, the Council of the District of Columbia enacted a variety of measures to prevent the spread of COVID-19 and protect District residents. Included among these measures was a moratorium on evictions "during a period of time for which the Mayor has declared a public health emergency."

            In District of Columbia v. Towers, 21-CV-34, 2021 WL 4617981 (D.C. Oct. 7, 2021), the District of Colombia's highest court considered whether this moratorium violated the landlords' due process right to access the courts. The case came to the appellate court after the District's lower court (the Superior Court) held that the moratorium on eviction filings for the duration of the public health emergency was unconstitutional. Specifically, the lower court held that the moratorium infringed on property owners' fundamental right of access to the courts because "[a] landlord's interest in summary resolution of its claims against a tenant has a constitutional basis." The District of Columbia appealed the lower court’s decision.

The Lawletter Vol 46 No 6

Anne Hemenway—Senior Attorney, National Legal Research Group

            Facing tens of thousands of claims against Johnson & Johnson's ("J&J's") baby powder and other talc products, alleging that the baby powder contains asbestos and causes cancer, J&J put the talc claims into a separate entity called LTL Management LLC, which then filed for Chapter 11 bankruptcy in mid-October 2021 in the U.S. Bankruptcy Court for the Western District of North Carolina. In re LTL Mgmt., LLC, No. 21-30589 (Bankr. W.D.N.C. Oct. 14, 2021). J&J itself is not part of the bankruptcy filing.

            The pharmaceutical company's corporate shuffling and bankruptcy maneuver is known as a "Texas two-step" bankruptcy, whereby J&J split its business through a divisional merger under Texas law and created a new entity to carry the talc liabilities. The Texas law allowed J&J to avoid accountability for the over 40,000 talc powder claims. The State's divisive merger statute, Tex. Bus. Orgs. Code Ann. § 1.002(55)(A), allows a company to divide into two separate entities. Because a divisive merger is not treated as an assignment of assets or liabilities, it is used as a strategic alternative to a traditional spin off or asset sale.